Take Steps To Reverse Oil Production Decline – PIAC to GovtTake Steps To Reverse Oil Production Decline – PIAC to Govt

Prof. Emerita Elizabeth Ardayfio-Schandorf (L) with Prof. Paul Kingsley Buah-Bassuah launching the report

 

The government and relevant regulatory bodies have been urged to take appropriate steps to reverse production decline in the country’s existing oil fields.

Chair of the Public Interest and Accountability Committee (PIAC), Prof. Emerita Elizabeth Ardayfio-Schandorf, who made the call during the launch of its 2023 report in Accra, said crude oil production declined for the fourth consecutive year in 2023.

She said crude oil production dropped from 71.44 million barrels in 2019 to 48.25 million barrels in 2023 representing an annual average decline of 9.2%.

Explaining some highlights of the upstream petroleum industry, production of oil and gas, petroleum revenue allocation and utilisation during the period under review, she pointed out that the last petroleum agreement signed was in 2018.

The report revealed that development and production costs continue to be significantly high in the Tweneboa Enyera-Ntomme (TEN) field, while production remains low by more than three million barrels, as compared to Sankofa Gye-Nyame even though there was no drilling in both Fields.

“The total proceeds from Jubilee Oil Holdings Limited (JOHL), lifting received in 2023, amounting to US$70,456,718.93, were not paid into the Petroleum Holding Fund (PHF) for the second consecutive year.

This brings the cumulative proceeds of unpaid revenue into the PHF by JOHL to US$343,108,927.88 as at end of 2023,” the report revealed.

“Allocation and disbursements of annual Budget Funding Amount (ABFA) to the Industrialization Priority Area has reduced from 1.15% in 2020 to 0.11% in 2023, thereby undermining the essence of prioritization,” the report added.

 

Recommendation

The Report recommended that the Ghana Revenue Authority (GRA) and the Petroleum Commission intensifies audit of development and production costs in TEN and other producing fields while the selection of the ABFA priority areas must be guided by a long-term national development plan approved by Parliament in conformity with the Act.

Although it commended the Ministry of Finance for disbursing 5% of the ABFA to the District Assembly Common Fund (DACF), it also urged the Ministry to ensure that subsequent disbursements to the DACF meet the minimum requirements of 5% of the ABFA.

The Committee further called on the Ministry of Finance to ensure that the ABFA disbursed to DACF is utilised in accordance with the provisions of the Petroleum Revenue Management Act (PRMA).

Present at the launch held at the University of Ghana, Legon also include stakeholders in the oil and Gas industry, Head of Geography and Resource Department, University of Ghana, Prof. Charlotte Wrigley-Asante, Principal of the University of Ghana, City campus, Prof. Joseph Yaro, and students.

 

By Ebenezer K. Amponsah

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